"This budget contains truths you may not want to hear," Quinn said. "But these are truths that you do need to know. And I believe you can handle the truth."

Quinn said too many governors and lawmakers have spent too much over the past 35 years.

"Today, our rendezvous with reality has arrived," Quinn said.

The governor focused the early portion of his speech on the need to reform state worker pension systems. Quinn blamed previous governors and General Assemblies for not funding the pension system over decades, pointing out that pension payments now take up 15 percent of the state's main checking account as a result.

A panel of lawmakers has an April 17 deadline to submit recommendations on reforms to reduce costs.

"I want to repeat: everything is on the table for our pension working group," Quinn said.

Quinn also talked about the need to reform the state's Medicaid system to save it. Demand is increasing, the state is behind on paying its bills and the system could collapse, Quinn aides have said.

The governor tried a different approach: instead of laying out specifics, he suggested he'll work with lawmakers to come up with solutions. This applied to pension reform, Medicaid reform and finding new revenue by closing corporate loopholes.

Quinn also spoke from prepared remarks, as he did three weeks ago during his State of the State speech, instead of riffing off an outline. That less structured approach had drawn criticism in past years as rambling and lengthy and unfocused.

Republicans criticized what they said is more spending in the budget. Republican Comptroller Judy Baar Topinka applauded Quinn for offering specific budget cuts.

“But taken in totality, today’s budget proposal amounts to a hodgepodge of ideas that are not thought through, and that will do little to address the state’s mountain of unpaid bills," Topink said in a statement. "Sadly, the numbers don’t add up – and in truth, appropriations from the General Funds are up more than $500 million over the current budget."

The top two Democrats praised their fellow Chicagoan, Quinn, for putting forth what they viewed as a balanced budget proposal rather than following up last year’s blueprint that was $1.4 billion or more out of whack.

Madigan said Quinn delivered a “strong message” that pensions and Medicaid funding must be tackled, calling it a “legitimate request” that lawmakers stay in session until solutions are found.

Cullerton called it time to “take the next leap forward in comprehensive pension reforms that control costs while preserving the constitutional rights of current employees and retirees.”

“Unlike Indiana and Wisconsin, we intend to work with unions to accomplish this goal,” Cullerton said.

Noting Quinn presented “tough choices,” Cullerton warned the costs of inaction on pensions and Medicaid far outweigh the downsides because their growing costs will eat away money that could be used for other needs.

The speech also did not mention the expansion of casino gambling. Quinn stopped a major casino expansion plan last year, denying Chicago Mayor Rahm Emanuel a city casino.

The governor announced several prison closures and also consolidating 20 Illinois State Police telecommunications centers. The savings will allow the state to train two new cadet classes of state police, Quinn said.

The governor said he'll cut his own office's budget by 9 percent and called on other statewide office holders to do the same.

Quinn, a longtime advocate for veterans, said he'll increase the care staff at four veterans homes.

Money for schools would remain essentially flat — a better fate than the 9 percent cuts most state agencies would suffer.

The budget does not call for general tax or fee increases. Quinn called for closing corporate tax loopholes, but said he wants his revenue director to work with state lawmakers to come up with a list.

The problem is the same as it's been for years at the Capitol — there's not enough money coming in while costs are rising. The quick math: The state expects to take in about $700 million more during the financial year that starts July 1. State worker pension costs alone will rise by more than $1 billion.

"There's no new money for anything else, that's the squeeze," said David Vaught, Quinn's budget director, on Tuesday.

The governor suggested closing the controversial Tamms super-max prison in far southern Illinois, the women's prison in Dwight and youth prisons in Joliet and Murphysboro.

Shutting down the super-maximum prison already is drawing plaudits from groups across the county that contend the conditions at Tamms are so harsh that it qualifies as cruel and unusual punishment.

John Maki, executive director of the John Howard Association, said Tamms is "overly harsh" on prisoners, who are kept in near-isolation. The prisoners face psychological damage that can make behavior worse, he said. But while it would be cheaper to house super-max inmates elsewhere, Maki said, it "doesn't make sense" to close the women's prison at Dwight and it doesn't address cells that are "seriously overcrowded."

In addition to already-planned closures of Tinley Park Mental Health Center and Jacksonville Developmental Center, Quinn will call for closure of the Singer Mental Health Center in Rockford and Murray Developmental Center in Centralia in spring 2013.

The Department of Children and Family Services would consolidate offices in its Chicago division, and the Department of Human Services would consolidate as many as two dozen local offices across the state.

Quinn also is calling for a string of consolidations at telecommunication centers and a forensic lab in Carbondale with the state police, at an animal lab in Centralia with the Agriculture Department and at state garages where vehicles are repaired.

Along with the flow of bad news, the governor also hopes to stimulate the state's lagging economy with a public works program for schools and universities, water infrastructure and decrepit state buildings. Quinn aides said the idea is to spend $1 billion in construction money each on education, water and state buildings, but declined to say how to raise the money to pay for it in hopes of brokering a funding plan with lawmakers.

Even before Quinn's noon speech to the General Assembly, Democrats were decrying the cuts and Republicans were arguing Quinn wasn't cutting enough.

The Tribune reported Monday that Quinn will seek to slice $2.7 billion in Medicaid costs, a action that could reduce service and types of care available for the state and federal program to provide health care to the poor.

Rep. Mary Flowers, D-Chicago, lambasted the governor for balancing the budget "off the backs of the sickest and the weakest and the least of thee."

Following a legislative hearing about expected state income, Flowers also chastised Quinn for considering a cutback in hours at the Abraham Lincoln Presidential Library and Museum in Springfield — the most popular presidential library in the nation, which draws more than 350,000 tourists and schoolchildren a year. Some tourist sites would close up to two days a week during off-peak times, the administration said.

"I'm not happy at all," Flowers said. "In light of Presidents Day just being a couple of days past, Lincoln would probably be sitting at his desk with the candlelight burning, crying and knowing that the children of this state would be deprived of the opportunity to learn about our history."

Republicans predicted that Quinn's budget numbers, when fully examined, could show an increase in spending over the current budget by $50 million to $550 million, depending on how different costs are calculated.

"He's creating an impression that he's making deep spending cuts when, in fact … the budget that he's going to release tomorrow increases spending over the one that runs a deficit this year," said Sen. Matt Murphy, R-Palatine. "So the idea that fiscal responsibility has come to the Quinn administration is patently false."

The Quinn administration estimates 750 state jobs would be eliminated through layoffs and attrition, bringing the state payroll down to 51,560 workers. That drew a strong response from the largest state employees union.

"Further devastating cuts to public services and thousands of lost jobs are the worst possible approach to what ails our state," said Anders Lindall, spokesman for theAmerican Federation of State, County and Municipal EmployeesCouncil 31.

The governor will call on lawmakers to make major changes to the state employee pension system and Medicaid program, but aides said Tuesday night that Quinn will not offer up specific ideas. Instead, the governor wants to see what proposals will come out of legislative groups formed to study the two key issues.

That same approach will extend to business tax loopholes that Quinn wants to close to generate more money. The governor will call for a team effort with lawmakers to ferret out which loopholes will be targeted, said Brooke Anderson, a Quinn spokeswoman. Business groups generally have been successful in beating back such moves in recent years.

One industry Quinn plans to target is oil. He wants to impose a tax on companies with drilling rigs so far out at sea that they sit on the outer continental shelves and thus avoid paying taxes. The administration hopes it will generate up to $75 million.

Overall, Quinn expects to have $33.9 billion to spend — about $700 million more than this year — and hopes as much as $163 million of that can be used to pay down old bills. But Illinois still would carry over $8 billion in unpaid bills.

Many of the proposed closures would hit downstate areas represented by Republicans who frequently call for cutting the state budget but are reluctant to shutter state facilities in their own districts.

The state's money woes continue despite a major income tax increase more than a year ago.

"Every year we say this is the toughest budget, and I would say it again this year," said Jack Lavin, Quinn's chief of staff. "This is the toughest budget that we've ever faced."